Monoethylene glycol: Cycles

Port stocks, coal plants and a record 2020 low

MEG prices swing with polyester demand, Chinese port inventories and the run rates of coal-based plants. Oversupply has kept prices near cash cost for much of 2019-2025. The floor is set by Chinese coal-based and naphtha-based cash costs, around $450-500/t CFR China (indicative); the ceiling by Gulf supply disruptions and textile demand surges. Because MEG is liquid, non-hazardous and heavily traded, it is one of the few chemicals with a liquid futures market (Dalian EG).

Proxy margin for naphtha-based producers. With MEG at $508/t and ethylene in the $700s/t in late 2025, the spread was near zero or negative (Argus; ChemOrbis).

Booms and busts

1. 2017-2018

   Strong Chinese polyester demand and tight supply before the coal-MEG wave.

   CFR China MEG above $1,000/t in early 2018, then fell to about $600/t by year-end (indicative, ICIS historical)

2. 2020

   Covid demand collapse and port stocks above 1 Mt.

   CFR China MEG near $350/t in April 2020, a record low (indicative)

3. 2025

   New Chinese units (Yulong 1 Mt) and weak margins; prices drifted lower.

   CFR China $508/t on 1 Oct 2025, down $11 in four weeks (Argus)

4. 2026

   The 2026 Iran war disrupted Gulf exports through Hormuz; EQUATE (about 1.15 Mt/yr) declared force majeure in mid-March and SABIC on about 7 Mt/yr of glycols on 27 March (ChemOrbis, Apr 2026). MEG tracked crude.

   MEG up nearly 8% in the week to 21 Aug 2026; Brent above $90/bbl on 25 Aug (ICIS via Hellenic Shipping News)

What drives the cycle

• Polyester demand in China and India. Fibre and PET take about 80% of MEG.
• China port inventories. Main East China ports hold stocks that signal over- or under-supply.
• Coal-to-MEG run rates. Coal units are the swing supply.
• Gulf export flows. Saudi and Kuwait supply goes through Hormuz.

Metrics to track